Looking for KPMG's Mystery Man

4/10/2013 11:00AM

The identity of the auditor of a public company shouldn't be a secret. Unfortunately, in the U.S., it is—to the detriment of investors and financial markets. Heard on the Street's David Reilly discusses. Photo: AP.

This transcript has been automatically generated and may not be 100% accurate.

... I ... we are talking about geeky Energy's international man and this straight ... it's certainly a mystery man ... when the story the scandal broke what the insider trading at KPMG ... the question was okay well ... who was the partner of Iles why was it so hard to figure it out the Wall Street Journal ... out we actually ended up sending somebody out of the guys have to figure the whole thing out why our auditor's names no ... David Reilly Heard on the Street columnist writing about this one ... it's a great question and a request is an incredible quirk I mean it's ... it's a you look in a new report for company heaven or a report ... and it's signed ... by KPMG the firm is at the firm will really big ten or the other right in front of you never know I mean ... the audit is the basis you know that with that the numbers on the basis for any investment decision ... the boy did is integral to that in uni don't know who is the person who is responsible for that relative who is the one who's actually saying ... my name is on the line here ... in you can find out and yelled walking a fine and what why is this that this is because the audit firms have been wanted ... for reasons of potential liability and some other reasons that have someone's name suntan and Darebin efforts ... the PCAOB which regulates the audit for ... the first team in two thousand the line with the concept really saying maybe we should have the letters actually selling your the report ... was until two thousand eleven that became the proposal will not for them to sign it just to again defied the law to partner with ... the industry has fought that now looks like me be ... the might sometime this spring actually go ahead with that rule but it's it's high time they just didn't go and do this you should be Obel no in fact the most part the Europe ... in the UK ... the duo signed in you do now and then say you were to peace ... studies have shown that because there's more transparency around who specifically doing these on its ... young defender why did I cited a study by a joke or so at the University of Tennessee where he looked at the performance ... old companies in terms there are a lot of things the grease the Manson and water problems ... after that sign your farming came in ... to being elected as two thousandnine ... and what he felt was yes avoided quality improved and it only makes sense what did you know your name is out there and you're going be responsible ... you are less susceptible some pressure is you're going to really ... go that extra yard because of it ... right ... do you think this scandal agency has had an unknown unknowns ... these are the Number public companies this island to the audit is Ernst and young his biggest PricewaterhouseCoopers ... do you think that this scandal ... because nobody knew the guy's name ... this is ... the role of changes and don't get why the happening there isn't yet on when someone from inside is that ... if I was getting away from Italy like to be ... there to do a t think that this scandal told me the fuel more sparkle more push ... to this idea of having the audit I think it well I think this is deftly something that that highlighted for people that this is not why is everyone a mystery ... to every media lead Sandoval on like this faulted sketches of all the ... public the auditor who was this guy and investors don't know ... that just doesn't except site ... R I B Riley keep an eye on this one thank very much